TY - JOUR
AU - Rauch,James E.
AU - Trindade,Vitor
TI - Ethnic Chinese Networks in International Trade
JF - National Bureau of Economic Research Working Paper Series
VL - No. 7189
PY - 1999
Y2 - June 1999
DO - 10.3386/w7189
UR - http://www.nber.org/papers/w7189
L1 - http://www.nber.org/papers/w7189.pdf
N1 - Author contact info:
James E. Rauch
Department of Economics
University of California, San Diego
La Jolla, CA 92093-0508
Tel: 858/534-2405
Fax: 858/534-7040
E-Mail: jrauch@ucsd.edu
Vitor Trindade
University of Missouri
Department of Economics
Columbia, MO 65211
E-Mail: TrindadeV@missouri.edu
AB - Ethnic Chinese networks, as proxied by the product of ethnic Chinese population shares, are found in 1980 and 1990 to have increased bilateral trade both within Southeast Asia and for other country pairs. Their effects within Southeast Asia are much greater for differentiated than for homogeneous products, while for other country pairs their effects are neither economically nor statistically significantly different across commodity groups. We interpret these and other, complementary findings as showing that (1) where ethnic Chinese communities are relatively large fractions of their countries' populations and have relatively numerous direct connections across international borders, they facilitate international trade primarily by helping to match international buyers and sellers in characteristics space, and (2) ethnic Chinese communities that are small fractions of their countries' populations are close-knit and facilitate international trade mainly by enforcing community sanctions that deter opportunistic behavior. The smallest estimated increase in bilateral trade in differentiated products within Southeast Asia attributable to ethnic Chinese networks exceeds 150 percent, suggesting that the informal trade barriers these networks help to overcome are economically important.
ER -